Will social security recipients receive a second stimulus check

Back in March, many people enjoyed a $1,400 stimulus check thanks to the American Rescue Plan. But at this point, the likelihood of there being a fourth stimulus check in the near term is low. That's because the economy has improved tremendously over the past six months, and right now, it's harder to make the case for widespread aid.

But some advocates insist that while the general public may not need another stimulus, seniors on Social Security should be an exception. In fact, the nonpartisan Senior Citizens League is calling on lawmakers to send Social Security recipients another round of $1,400 checks.

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Seniors need help maintaining their buying power

As of now, we don't know how large a raise (known as a cost-of-living adjustment, or COLA) seniors will be getting in 2022. The reason is that annual COLAs are calculated based on third-quarter data from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W).

Currently, we only have CPI-W data from July and August. And until September's number comes in, that COLA can't be determined.

But seniors should get the official word on their 2020 COLA shortly. And no matter how it shakes out, it's looking like Social Security recipients will be getting their largest raise in decades.

In fact, based on the data we already have from the CPI-W, experts are projecting that next year's COLA will come to at least 6%. By contrast, going into 2021, seniors saw their benefits rise by just 1.3%.

But in spite of the generous COLA that's anticipated for 2022, the Senior Citizens League insists that Social Security beneficiaries need help maintaining their buying power. For years, Social Security's COLAs have done a poor job of keeping up with inflation. And even if a giant raise comes in next year, the reason behind it will boil down to extreme increases in the cost of consumer goods that have impacted seniors and workers alike.

Or, to put it another way, even if seniors get a large raise for 2022, they're unlikely to wind up coming out ahead financially because the general cost of living has increased so much. And so giving Social Security beneficiaries their own stimulus check could mean actually allowing their buying power to increase.

Will lawmakers get on board?

Whether lawmakers agree to a senior-specific stimulus check is yet to be determined. But it's clear that seniors who get the bulk of their income from Social Security have struggled for years, and that could continue even if 2022's raise is as generous as experts are thinking it'll be.

Let's remember that Medicare Part B premium hikes will also be the wild card seniors will have to grapple with in conjunction with that raise. If Part B costs go up enough, that alone will erode whatever benefit seniors might glean from higher Social Security paychecks.

Will the process of calculating COLAs change?

The viability of a near-term senior-specific stimulus check may be dubious. However, one change that could come down the pike is a shift in the way COLAs are calculated.

For years, senior advocates have called upon lawmakers to use the Consumer Price Index for the Elderly (CPI-E) as the basis for calculating COLAs. The logic is that this index more accurately represents the costs seniors face.

Swapping the CPI-W for the CPI-E could result in higher COLAs down the line, which could, in turn, give seniors more buying power. And while that doesn't have the same ring as a fourth stimulus check, it could be a lifeline nonetheless.

Editor’s Note: This article was originally published on May 4, 2020, and was updated in April 2021 to reflect the third stimulus payment.

As the third round of stimulus checks roll out, many Social Security beneficiaries have questions about whether they qualify for the stimulus checks, how they’ll get them, and whether they need to take any action. Thankfully, the IRS has cleared up a lot of the confusion, so if you find yourself scratching your head and are looking for answers, we’ve got you covered.

To help you understand what it means for you, we’ve distilled the most important information about the coronavirus stimulus checks for Social Security beneficiaries, railroad retirees, and Social Security Disability Insurance (SSDI) beneficiaries into the top six things you should know.

1. Yes, Social Security beneficiaries, SSDI beneficiaries, and railroad retirement beneficiaries will get a third stimulus check

Will Social Security beneficiaries get a third stimulus check/payment? What about retired seniors? If I’m on disability, do I get a third stimulus payment?

These are a few of the most common questions our tax pros have received from clients, and the answer to all of them is yes. Anyone eligible who receives Social Security benefits — including railroad retirees receiving Railroad benefits, SSDI beneficiaries, and retired seniors — may qualify for all three stimulus checks — in most cases in the form of direct deposit payments.

If you haven’t received your third stimulus payment yet, it may just be a matter of time. Read on and we’ll outline the details for you.

2. Social Security recipients who typically don’t file do not need to file a tax return to get their stimulus check

Social Security recipients do not have to file a tax return to get their third payment.

The IRS is now working with the Social Security Administration and other federal agencies to obtain updated 2021 information, and if you didn’t file a 2019 or 2020 tax return, they will instead use your Social Security benefit information (Form SSA-1099 or Form RRB-1099) to determine where to send your payment.  

3. There are ways to claim missing money if you didn’t get the correct amount for yourself or dependents in any one of the stimulus payments

Social security beneficiaries who didn’t get the correct stimulus amount (from either payment) have a few ways of claiming it.

If your third stimulus was based on your 2019 return and the 2020 return you file would qualify you for money, the IRS will re-determine your eligibility and issue you an additional “top-up” payment for the difference. 

If you didn’t get the correct amount in your first or second payments, you may be able to claim the Recovery Rebate credit on your 2020 return this year. The Recovery Rebate gives you a tax credit instead of a direct monetary payment. Learn more about the Recovery Rebate Credit.

Dependents over age 16 are also eligible for the third stimulus payment. If you gained custody of a qualifying child in 2020, you can file your 2020 return now to claim the first and second stimulus payments as a Recovery Rebate Credit. Regardless of whether you received your third stimulus payment or not, filing your 2020 return will register that dependent for the third stimulus payment.

You should receive your stimulus checks the same way you receive your benefits — by direct deposit, debit card, or paper check. The IRS has said that the majority of the payments to Social Security recipients and other federal beneficiaries who do not normally file a tax return would be sent electronically and received on April 7.

Still getting paper checks? You can update your information for your benefits, but not for your stimulus payment.

5. Social Security beneficiaries, railroad retirees, and SSDI beneficiaries can check the status of their stimulus payment online even if they didn’t file a 2019 or 2020 tax return

The IRS has updated its “Get My Payment” portal to accommodate non-filers. You’ll need to enter your personal information before you can click through to view your status.

If you are seeing “Payment Status Not Available” when you check the “Get My Payment” tool, there may be three reasons why, according to the IRS:

• You’re not eligible
• Your payment hasn’t been processed yet
• The IRS doesn’t have enough information to issue your payment

6. Stimulus check scammers trying to trick Social Security beneficiaries are on the rise—Watch out!

As they always do, scammers are preying on Social Security beneficiaries, SSDI beneficiaries, and railroad retirees getting a stimulus check/payment. These scammers come in all forms — pretending to be doctors and government officials for example — to try and take advantage of unsuspecting victims.

One thing to remember — the IRS will not call you or email you regarding the stimulus payment for retirees and SSI beneficiaries. If you get a call, email, or letter from someone claiming to be the IRS and asking for your Social Security number or bank account information, you need to report them immediately to the Office of the Inspector General.

Need additional information beyond the stimulus payments and Social Security beneficiaries?

We know you may have more questions beyond whether people on Social Security will get stimulus checks/payments. Visit our Coronavirus Tax Impact page for the latest news and facts regarding the latest stimulus bill.